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UPDATED: IntersectENT Goes PUBLIC Ring That BELL!

UPDATED: IntersectENT Goes PUBLIC Ring That BELL!

UPDATED: July 1, 2015 Nevro Appoints Lisa Earnhardt to its Board of Directors

July 24, 2014

Rabbit with carrots 1


UPDATED:  Lisa Earnhardt, Chief Executive Officer of Intersect ENT that little company that could showed everyone and went public, as she rang the opening bell this morning!

Congratulations!  As was said, it’s a chess game (admittedly a surprising but happy one) and now the game is really getting started.  It will always be about ensuring those that built the company get paid not just the investors.  So far things are tracking as they’re moving from sprint mode to marathon mode.

Same carrot different company-no crow here-deep fried or otherwise.

UPDATED:  Intersect ENT and The Sociopathic Business Model™ Case Study:

Identify All Possible Outcomes

Any truthful information is good information it is how one chooses to apply it that matters-free will, individual choice and all that good stuff.  This one’s an All Play!

The trigger to a company possibly employing The Sociopathic Business Model™ is first the violation of employee EEOC rights followed by inconsistent and contradictory language.  If territories are unevenly divided or quotas unrealistically off-set those things could fall into EEOC violations under the retaliation claim (also possibly race, sex or religion).

The images below were posted to the anonymous rep board Medtech[y]  linked to this page discussing concern for reps regarding the 1 for 4 reserve split stock options which an expert (not myself) explained:

A reverse stock split normally indicates that there are a multitude of bad things happening at the company. Note: A large percentage of companies that execute reverse splits will continue trading lower after the split. Keep this in mind – a reverse stock split is normally a very big red flag. 

Intersect ENT Medtechy Jealous Reps comment

Checklist-of-Characteristic-of-The-Sociopathic-Business-Model (1)

Inconsistent & Contradictory/Demean & Insult

Lack of Accountability-Not explaining the real issues or concerns (employee stock options)

Manipulating-trying to imply the poster did not or does not think the sales team is talented (again the opposite it true). 

IF someone were jealous they weren’t a rep with a company it would stand to reason they’d want other reps to make less  money not more on stock options.  Calling attention to that point is to protect employees not demean them. However:

Intersect ENT Medtechy Boards

The balance sheet of an S-1  is regulated (Sarbanes Oxley) just like the 510 (k) and corporate integrity agreements; and, we know that the medical startup community is a pillar of accountability. The S-1 could be impeccable but it’s still not the point so instead of actually responding to the question regarding the split and how it will impact the reps (who you know built the company):

Insulting & Demeaning

Lack of Accountability

Verbal Outburst

Intersect ENT Medtechy Boards S-1

Intersect ENT1

And this was a fan favorite on the site:

Inersect ENT Medtechy fan favoite

Inconsistent & Contraditory Language- “world class reps” but demeans and insults those same world class reps?

Demean & Insult as means to threaten or intimidate

Manipulates-Again the question is how the reps will do under the current stock structure-still not answering.

And someone’s less than happy response to the above: “Only those TRULY in the know ” (Is it just me or do you hear that with a Thurston Howell III accent?)  And PS Thurston “White Knighting” for someone usually is a direct arrow to the weakest link. (Start kissing one ass lower).

Intersect Response from very angry but correct poster

Rarely Challenged & Prefer to Work that way

It appears more than one of us can read and comprehend the S-1.

Intersect Response from very angry but correct poster 2

Investors along with the resverse split options also look at things like:

200,000 sinus surgeries are performed every year in the U.S.

37 million suffer from sinus (elective) + higher deductible = decrease in procedures

11,000 registered ENTS (reality less than half are viable targets)

IF each of the 11,000 doctor evenly split that number = 18 FESS annually

Balloon/device used in 20% of cases

Fighting over 40,000 potential cases + or – between 3 balloon companies and one (ahem-no competition) drug delivery system. It’s admirable to want to go the IPO road, it’s a lot harder; but, the fact remains the reps who built the company rarely are compensated properly.   Trying to fix a broken system by exposing the truth to empower employees isn’t easy but perhaps that’s where my “talent” really rests.

I wish the company nothing but the best; but, more importantly I hope they compensate the world class reps  as such.

UPDATED:  July 17, 2014  Is Intersect ENT getting ready for their IPO sooner rather than later?

Morning Money reported on June 30, 2014

Through Monday, 51 healthcare companies have made initial public offerings, accounting for 24% of the total U.S. IPO market.  Healthcare stocks are once again at the forefront of the IPO calendar this week as five of this week’s seven IPOs are healthcare companies.

This is not my area of expertise but an area of interest as for tracking trends in a very crowded market and testing a few theories to see how the employees will come out in this process.  Again, a goal of this site is to help startup employees make the best decisions based on facts to try and provide the tools and resources to protect themselves.  Hyper-growth is the expectation during the initial ramp up but if sold or goes IPO the sales model must adapt from hyper-growth to a sustainable sales model.  (This tends to be one area where startup employees get jammed). SEC IPO IntersectENT

Inersect ENT SEC Amendments to S1 in July 2014

One of those companies was Intersect ENT and as you can see from the SEC records there’s been quite a bit of activity since publically announcing (their previously privately filed) IPO on June 23, 2014.  This likely is attributed to the company going through with the IPO (which some signs are pointing to) or there’s still the possibility of the company being sold to one of their investors.  My gut still tells me the acquired option makes the most sense but this is a chess game of sorts.   Again, I’d be curious to hear from those more familiar with this sector of the business world.

1. July 9, 2014  Intersect ENT Amended their filing to include the sale of common stock.

Intersect ENT July 9 Filing Update

Intersect ENT July 9 Filing Common Stock


Here’s the concern:  Intersect ENT July 9 Filing Common Stock split



A reverse stock split is usually bad news for a company according to Dave Manuel as he explains:

A reverse stock split is when a company reduces the number of their outstanding shares. The value of the shares and the company’s earnings per share will rise proportionally after the split. 

-- definition of financial term - reverse stock split --For instance: you own 1,000 shares in XYZ, and the current market value of each share is $1.00. 

The company announces that it will be executing a 1:2 reverse share split. This means that instead of 1,000 shares, you will now own 500 shares. However, instead of the market value of each share being $1.00, each share is now worth $2.00. So the value of your stake is the same – you simply own less shares that are now worth more money.

Also, if the company had an annual earnings per share of $1.00, this number would now be $2.00 per share.  So, if I’m applying this correctly each share of stock would be worth even less than the example above.  

A reverse stock split normally indicates that there are a multitude of bad things happening at the company. Note: A large percentage of companies that execute reverse splits will continue trading lower after the split. Keep this in mind – a reverse stock split is normally a very big red flag. 

We’ve seen in startups before that it might not be outside the realm of possibilities to intentionally place underqualified people in executive positions specifically designed to later exploit; and, the 1 for 4 reverse split stock effective July 11, 2014  may support that theory.  Employees found in this situation don’t have a lot of options sadly other than perhaps to try and negotiate higher base salaries of $250,000 to offset the stock loss with lower (and reasonable 10%) growth over the next five years prior to the IPO or sale.

This is a fair indication that investors are not confident and more information points to that fact:

Especially when Intersect ENT’s competition is also an investor (Medtronic) and acquiring one device (Intersect ENT)  to meld into a more established company with more products makes sense like Medtronic and is less risky for investors who receive money immediately opposed to the grace period where the company could potentially be underwater by the time investors can pull their investments.

Intersect ENT Competiton is also an investor Medtronic

2.  The initial IPO was filed at $80 million and recently dropped the price to roughly $62 million again it could be a sign that investors do not have the confidence that the company won’t be underwater by the time they’re able to remove their money.

Silicon Valley Business Journal

Intersect ENT Price Drop

So for now this is a little speculation, a little fact based evidence and a wait and see if everyone is optimistic regarding an IPO and what the bigger question and the reason the page exists is to see if the employees were taken care of or taken for a ride with a carrot out in front.  Time will tell; and, it sounds like we won’t have to wait that long.

And here’s an interesting read from startup device’s sister the startup tech industry– from Grooveshark employee  anonymously published to Pastebin.

Original Story

June 25, 2014

Between FDA recalls, whistleblowers, possible antitrust violations and now an IPO its been a busy few weeks in the medical market.


Lisa Earnhardt CEO 

Intersect ENT

Intersect ENT, a Menlo Park, CA startup sinus innovator of Propel closed $30 million in their Series D funding February last year; and on May 2, 2014 confidentially filed (and announced this week) SEC filing of $80 million for an IPO.  Norwest Venture Partners (NVP) ,  Kleiner Perkins Caufield & Byers,* U.S. Venture Partners, PTV Sciences and Medtronic are all listed as investors. Interestingly enough Medtronic is also listed as a competitor and Medtronic also owns a 7% stake in Intersect ENT. We’ve seen this before with another one time Intersect ENT competitor -where again it’s worth asking- is this a conflict of interest or just all part of doing business?

Johnson & Johnson’s, Ethicon’s  Acclarent who “made a decision to cease distribution of Relieva Stratus™,” last year, made a similar move with an  IPO of $86.25 millionwithdrew their IPO, and was purchased by one of their investors, Johnson & Johnson’s Ethicon for $785 million.  


And let’s remember who makes the money in the startups and it’s not the Common Stock holders.

Common Stock Company Sold No IPO

Confused yet?  Yeah it’s supposed to be confusing especially to people like the SEC.  It’s not completely out of the scope of reason that an IPO is used to leverage or bring buyers to the table and drive up the asking price.  Similar to what we’ve witnessed Acclarent or currently with Allergan/Valeant (and Valent’s side deal with Johnson & Johnson’s Ethicon’s Mentor/ mess (not an IPO but it’s driving the price up daily).

Sinus Devices



Johnson & Johnson Ethicon Acclarent May 2013 Stop Selling Stratus

In full disclosure I did work for Acclarent who was purchased by Johnson & Johnson’s Ethicon; and, I do personally know many people at Intersect ENT.  And in Johnson & Johnson’s Ethicon’s Acclarent’s words:

“In our strategic plan,  we remain committed to participating in local drug delivery in the future, but acknowledge that the Relieva Stratus™ is not the right platform for us here in the US.”

Could Intersect ENT be part of Johnson & Johnson’s Ethicon’s Acclarent’s strategic plan?  Or Medtronic’s since they’ve already invested in Intersect ENT? I don’t know what’s in Intersect ENT’s pipeline (other products set to be approved by the FDA) but I was in the industry a long time and if I were to crystal ball Propel it’s poised for sale. Fact based evidence over time dictates that unless they’ve got  the cure for cancer in their pipeline this IPO is all for show; but, I can see a bidding war that would make Ackman hostile that he’s not involved (unless of course he is?)

As this page has pointed out fraud is rampant in the startup world and employee loss of EEOC rights is a trigger; and,  it looks like those who financially support startups (VCs) may employ some of the same tactics as The Sociopathic Business Model™ :

Checklist of Characteristic of The Sociopathic Business Model


Kleiner Caufield & Byers* according to San Jose Mercury News (9.20.2013)

Silicon Valley’s most fabled venture capital firm says it’s ready to do battle with a former partner who’s filed a sex-discrimination lawsuit. (If a company is willing to overlook EEOC violations they are far more likely to engage in greater unethical or illegal activity).

Kleiner Perkins Caufield and Byers had hoped to compel  (is that fancy law talk for bully and not recognizing the right’s of others?) Ellen Pao to take the case to binding arbitration, keeping the suit’s scandalous accusations — and the firm’s inner financial workings — out of the public eye.

Kleiner spokeswoman Christina Lee also echoed the firm’s earlier contention that Pao’s complaint is “wholly without merit.” (demean, insult and intimidate)

Pao’s lawyer, San Francisco-based Alan Exelrod, said he’s been unable to add the wrongful termination claim to the suit while the case was under appeal. The lawsuit already asserts that Pao’s punishment while employed at the firm cheated her out of millions of dollars.

“The next step is then starting with discovery, doing the depositions that are necessary, gathering the documents,” Exelrod said.

While he declined to estimate when a trial date might actually be set — or comment (on whether the two sides may pursue an out-of-court settlement) — several legal experts said it could be a year until jury selection occurs.

I’m feeling lucky and the crystal ball says this will settle out of court.

Medtechy[y] Disclaimer

In full disclosure I did have two friends forward my resume to IntersectENT four years ago (where I was instructed to email my resume directly to Vp of Sales) and again in the last two year.  I have never interviewed with the company; and not worked in the industry since July 2012. 

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